I am just a hobbyist in photography. And I do not have specific interest areas (as of now). So while looking for different things to try with photography, I kept coming across things which require use of an external flash. Also a lot of my photographer friends have one (or more).

I want someone to tell me why it would be good to have one (or not) and what things I can try achieving when I get one.
Also a note: I am thinking of cheaper or cheapest flashes when I say flash. Something like YongNuo series and Not Canon 600Ex.

(Edit: There one other question which has answers that list every advantage of using an external flash. I could get that from Google god. But I want to know the needs/thinking in photography that leads to it.)

Thank you for detailed answers everyone. Though I have marked only one answer as final answer, all of the answers here have helped me. I finally bought YongNuo 468 II ETTL flash. And I am already happy with the decision of buying a TTL flash as it really comes handy at 'quick photos' times.
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theSudaApr 16 '13 at 9:25

5 Answers
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It starts off with you needing more light in a given situation. Either you getting extremely grainy photos due to low light, or you are in need of a wider lens but can't afford the slower maximum aperture, or you are struggling to eliminate camera shake with slower shutter speeds.

However once you start to learn how to use flash, and you get the flash off camera or at the very least not pointing directly at your subject then you start to realise that it's not just about more light, it's about better light too.

The majority of indoor lighting these days is fluorescent, which is improving but does not yet have the broad spectrum of flash lighting. Far worse are the old style tubes found in office buildings, churches and sports halls - the spectra produced by these lights are very narrow, missing a large part of the red spectrum leading to unnatural green/yellow looking skin-tones. In addition to this the colour changes massively through the 50/60Hz mains cycle giving you very inconsistent results. Flash gives you a very broad spectrum centred around natural sunlight (colour can be tuned up or down with gels for different WB).

I want someone to tell me why it would be good to have one (or not) and what things I can try achieving when I get one

The main thing a dedicated flash unit provides is the ability to bounce the flash of a white ceiling/wall and provide the sort of light you'd get in a studio with a hideously expensive octobox. This was shot with a manual flash hand-held (whilst holding the camera with my other hand):

Small battery powered flash units produce incredibly short pulses at lower power settings and let you freeze action in ways impossible when working indoors without flash:

Once you have the flash off camera you can get the flash in unique locations, such as behind the subject, for dramatic effects:

Get the flash close and you can compete with the sunlight. This was shot outdoors in the afternoon pointing directly into a very strong sun. A pair of flashes close in prevent the subject from being completely silhouetted:

The key point here is that in addition to getting a flash, you need some method of triggering the flash so you can use it off camera. Fortunately the prices of portable radio triggers has fallen and reliability has risen significantly. It's just something else you need to factor in cost wise.

I am thinking of cheaper or cheapest flashes when I say flash. Something like YongNuo series

With the exception of one shot, the above images were all shot with a fully manual Vivtar 285. The only thing you get from a more expensive flash is automatic TTL metering. But you don't really need that, part of the learning curve is figuring out how to set the flash power. Plus it's usually less fiddly to just shoot a few test shots and dial in the power, than it is to get a full metering radio setup and mess around with the ratios. I would look at something like the Lumopro LP160, it has everything you need for off camera flash, nothing you don't need and it's cheap.

Thank you for the detailed answer. I looked up Lumopro LP160 but seems like it is discontinued. Amazon keeps showing me YN-560II. Anyway I would be glad know more details about preferring a full manual flash over an ETTL one.
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theSudaMar 21 '13 at 12:46

@DanNeely they're getting better certainly, recent CFLs also have a much broader spectrum, but there are plenty of the old style lights around, especially in large buildings like churches and sports halls.
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Matt GrumMar 21 '13 at 15:19

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@theSuda The LP160 has been discontinued to make way for the LP180, but you can still get them from certain retailers. Preferring a non ETTL flash is just about simplicity and cost. For on camera work, and professional work there are good arguments for ETTL. For education and shooting for fun manual is fine - after all you have to position and aim the lights manually so you might as well set the power while you're at it. I find the best case is to use voice activated lightstands, especially the type that can turn the power up and down for you.
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Matt GrumMar 21 '13 at 15:23

@DanNeely in order to be complete fair to fluorescent lighting I've rewritten that section :)
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Matt GrumMar 21 '13 at 16:01

Here are the two main reasons I think you should get an external flash as an hobbyist:

If you take pictures indoors - unless your house it extremely well-lit you will need to add light if you want a reasonable ISO at hand-holdable non-motion-blur shutter speeds (and the light from the popup flash sucks) - an external flash pointed at the ceiling solves this problem nicely.

You want to control your lighting - A flash let you control the power and direction of the light and the relative lighting of different objects in the frame - this opens up a lot of options you simply don't have without an external flash.

Note that if you want to be able to control lighting you will want some way to trigger the flash off-camera (cheap eBay radio triggers work just fine for a hobbyist just starting out) as well as a lightstand and probably an umbrella (also the cheap Chinese versions work just fine) and you will need to learn how to use the flash

While I went for a high end flash (the 600EX-RT and a 320EX), my main reason was to gain greater control over the lighting. While ambient lighting can give a really great feel of an environment, it sometimes lacks the detail or pop that you want for some shots. A good external Speedlite gives control of the angle and intensity of light both on and off camera and can throw light out a ways if you need it to.

The ability to bump flash and the inclusion of a flash diffuser are the main two features I use constantly. I basically never shoot my flash directly. I'm always bouncing it off the ceiling or a wall and almost always using the diffuser card included with it to give a much more natural look while throwing additional light on people in the foreground to make them pop out. This can be equally useful in a dimly lit banquet hall as it can be in the middle of a field on a sunny day.

With the addition of something like a Softbox or larger diffuser, you can achieve even more natural looking light with nice soft shadows where it doesn't look like your typical flash photo. Also, with radio control or optically controlled flashes, you can organize multiple lights from multiple angles and easily change the intensity of each group.

At the higher end of using flashes and strobes, it starts to get far more similar to concepts like 3 point lighting from video where you have one key light that provides most of the light, a fill light which softens shadows (from the front, but a different angle than the key) and then a back light which illuminates edges of objects and people in the foreground making them stand out more from the background. You can also use additional lights beyond that to troubleshoot particular areas of shadow that you don't want or to create shadow where you need it.

Getting an external flash is one of easiest and cheapest ways to dramatically improve the quality of your pictures. However you will need to learn to properly use it.

I purchased a flash few months ago. I did not see any improvements until I started experimenting with the bounce mode. I also tried using the flash off-camera with mixed results.

Please note that getting a flash will add a lot of weight to your camera. You will also need to make sure your flash batteries are always charged.

I am not sure that a casual shooter really needs an external flash.

I remember reading somewhere online "If you are not sure you need an external flash then you probably do not". I do not necessarily disagree with this. However if you can get a cheap flash then why not?